Confronting difficulty

Features - Largest Nonferrous Scrap Processors

Market conditions from mid-2015 to the start of 2016 might have been the toughest the scrap metal recycling industry has seen in the past 30 years. That statement is how Sims Metal Management CEO Galdino Claro begins his review in the company’s 2016 annual report. Sims, which maintains executive offices in New York City and in Sydney, celebrates 100 years in the metals recycling industry in 2017. The company’s 2016 fiscal year ran from July 1, 2015, through June 30, 2016.

“The market conditions … were not only the most difficult during my time at Sims Metal Management but perhaps the toughest the industry has seen in the past 30 years,” Claro says. He began his career with Sims in late 2013.

“Lower commodity prices and declining export demand placed further pressure on secondary metals volumes in North America,” Sims says in its 2016 annual report. In particular, U.S. exports of nonferrous metals weakened, with copper and aluminum scrap declining 9 percent and 13 percent, respectively, the company notes.

The substantial decline in commodity prices had “negatively impacted the economic attractiveness of secondary metal collection,” according to Sims.

The dual challenges of lower commodity prices and volumes required Sims, and many other metals recyclers, to take action.

Within the North American market, Sims sold or idled 10 facilities as part of a resetting plan aimed at divesting noncore and underperforming assets outside of key markets in fiscal year 2016.

In addition to these steps, Sims says it took actions related to cost savings, including reducing staff by 12 percent, streamlining overhead costs and improving metal margins. These measures “have driven a meaningful reduction in the operational fixed cost base” for Sims, the company says, with the overall effect of the resetting leading to “a meaningful improvement in earnings.”

Sims says it expects its North American metals business segment to strengthen during its 2017 fiscal year.

Top tonnage

Nonferrous scrap processors across North America have made many changes over the last few years to ensure they’re around in the coming years. This is reflected in Recycling Today’s updated list of North America’s 20 largest nonferrous scrap processors, which is ranked based on nonferrous scrap processing volumes in 2016.

Sixteen of the 20 companies that were on the 2015 list appear on the most recent edition of the list. Two of the companies that ranked on the 2015 list—Behr Iron & Metal and Newell Recycling Southeast—have been acquired by companies on the 2017 list: at No. 8, St. Louis-based Alter Trading Corp., and, at No. 7, SA Recycling, Orange, California, respectively.

The four companies that are new to the 2017 list include SA Recycling; Huron Valley Steel, Trenton, Michigan; Schupan & Sons Inc., Kalamazoo, Michigan; and Shapiro Metals, St. Louis.

Shapiro Metals, which had been featured on previous editions of Recycling Today’s list of the largest nonferrous scrap processors in North America, was edged out of the No. 20 spot in 2015 by Wise Recycling, the only new entrant that year.

On the move

As with Sims, some scrap metal recyclers sold, shuttered or idled facilities, while others made acquisitions. Of the 16 companies making the list again, six businesses added facilities, while another six closed or sold locations.

In mid-August 2016, Sims sold six facilities in Mississippi and Tennessee to OmniSource Corp., a subsidiary of Fort Wayne, Indiana-based steelmaker Steel Dynamics Inc. OmniSource ranks No. 1 on this list.

In mid-September, Ferrous Processing and Trading Co. (FPT), headquartered in Detroit, announced its purchase of two Sims operations in Detroit and in Toledo, Ohio. FPT ranks No. 10 on the 2017 list.

SA Recycling acquired Newell Recycling Southeast LLC, including a shredder installation in El Paso, Texas, and all of its operations in Georgia and Alabama, says Mark Sweetman, chief financial officer for SA. This purchase helped SA Recycling attain the No. 5 spot on this year’s list.

In January 2017 Schupan & Sons Inc. announced the purchase of a majority interest in Trinity Metals, an Indianapolis recycler of ferrous and nonferrous metals, magnesium and specialty metals, electronic scrap, fiber and plastics. Schupan & Sons ranks No. 12 on this year’s list of the largest nonferrous scrap processors.

Marc Schupan, president of Schupan & Sons, said at the time of the announcement that the acquisition of Trinity fits Schupan’s growth strategy for its recycling division.

Is someone missing?

The editors of Recycling Today received sufficient cooperation from the scrap industry to compile a list of the 20 largest nonferrous scrap processors that we believe accurately reflects the sector’s most active companies. All the companies on our list, with the exception of one, provided volume figures that we used to rank them accordingly.

While we’re pleased to have received such a good response, it is possible or even likely that some companies that belong on this list do not appear—either because they have declined to cooperate or they have “grown” their way onto the list, and we are not yet aware of it.

As we have done each time we conduct research for this list, we make attempts to invite any and all companies to take part if their managers would like to do so. One way to do that is to contact Recycling Today Associate Editor Megan Workman via email at mworkman@gie.net or by phone at 216-393-0298.

Schupan & Sons says it expects the partnership to allow for a more diverse product offering while broadening and simplifying its service area for existing key accounts.

The company says Trinity Metals is one of the largest postconsumer magnesium scrap processors in the United States. Trinity Metals produces custom-made, mill-ready magnesium scrap that can be directly charged into aluminum furnaces. Trinity also offers a range of alloying products for aluminum producing plants.

Encouraging infrastructure

With the Trump administration now in office, scrap companies are looking to the president’s promise for an infrastructure bill. With nonferrous metals markets influenced by the construction sector, this could have a dramatic effect on metals.

In February 2017, Schnitzer Steel President and CEO Tamara Lundgren met with President Trump and Canadian Prime Minister Justin Trudeau at the White House for a roundtable discussion about America’s infrastructure and the role of women in the workforce. Lundgren said at the time that the roundtable was “a productive opportunity to highlight matters that are important to our business.”

She noted how “infrastructure investment is important to the steel and metals recycling industries.”

Lundgren continued, “My focus in this meeting was to explore ways in which the public and private sectors can partner to spur investment in infrastructure and create jobs.”

At ConExpo-Con/Agg March 9, 2017, in Las Vegas, the Association of Equipment Manufacturers (AEM), Milwaukee, Chairman Michael Haberman, president of Gradall Industries Inc., New Philadelphia, Ohio, and AEM President Dennis Slater emphasized their support for a major infrastructure bill.

Haberman said of the industry, “We want to continue to grow,” adding that he wanted to use ConExpo as a platform to “urge President Trump and congress to follow through on their campaign promises and to pass a major infrastructure bill. ... a major infrastructure package would be a significant benefit to the equipment manufacturing industry and, thus, the whole economy of the United States.”

However, that same week during C&D World, the annual meeting of the Milwaukee-based Construction & Demolition Recycling Association (CDRA), March 8 in Las Vegas, market analyst Eli Lustgarten, president of ESL Consulting, St. Louis, said other items likely would take precedence over infrastructure, including fiscal growth, health care, reduction and elimination of regulations and tax reform.

“We’re not going to see any effect of infrastructure spending in 2017,” Lustgarten said. “The priority is health care, regulation and taxes.”

He called 2017 “a transition year.”

Paying attention to pricing

In its annual report, Sims notes that average selling prices for nonferrous and ferrous scrap were lower as prices dropped in the first half of its 2016 fiscal year.

Worldwide honor

Copper prices have been affected by the mostly weaker commodities environment, the stronger dollar, the surge of stocks in London Metal Exchange (LME) warehouses and revised supply expectations, according to the March 13 Weekly Market Report e-newsletter from the Institute of Scrap Recycling Industries (ISRI), Washington.

As of late February, copper prices had increased by nearly 25 percent since September 2016. However, copper prices trended downward in early March.

“In New York, COMEX May copper futures traded as low as $2.576 per pound on [March 9] after having started the week above $2.70 per pound. Since the beginning of March, closing copper stocks in LME warehouses have swelled by more than 130,000 tons to 331,200 metric tons as of [March 10],” according to the report.

The March 13 Weekly Market Report adds that a strike at Freeport’s Cerro Verde mine in Peru provided some support as the LME official three-month asking price for copper stabilized at $5,729 per ton March 10. Reuters reported that workers at the mill started an indefinite strike March 10 “that halted output of about 40,000 tons per month at Peru’s top copper mine.”

As for aluminum, the United States Geological Survey (USGS) shows that in 2016 aluminum recovered from purchased scrap in the United States was about 3.54 million tons, of which about 58 percent came from new (manufacturing) scrap and 42 percent from old scrap (discarded aluminum products).

Some of the positive sentiment for aluminum is being driven by potential cuts in Chinese aluminum production arising from the Chinese central government’s efforts to reduce air pollution, especially emissions from its manufacturing plants.

Nonferrous metals markets likely will face changes in the years to come, with the most adaptable scrap recycling companies coming out on top.

The author is associate editor of Recycling Today and can be contacted via email at mworkman@gie.net. Recycling Today Editor Brian Taylor, btaylor@gie.net, and Senior Editor Dan Sandoval also conducted research for this list.

Departments - Nonferrous

Moving into the spring, nonferrous scrap metal dealers are expressing optimism. Some lingering pockets of uncertainty remain, but it appears most recyclers feel the upward trend in pricing, demand and general market conditions seen since the fourth quarter of last year will continue through much of the spring.

Copper prices have increased by nearly 25 percent from October 2016 through early March of this year. However, they retreated a bit as of mid-March, though several industry sources say there isn’t much concern over the short-term price of the metal as scrap dealers have been able to maintain spreads.

Several sources say higher-than-expected copper stocks, especially in China, could be influencing pricing. According to multiple reports, despite labor disruptions at several copper mines, the Shanghai Futures Exchange reported copper inventories in early March of nearly 320,000 metric tons, the highest level since April 2016.

A Reuters article quotes Robin Bhar, head of metals research for Societe Generale, a multinational banking and financial services firm based in Paris, as saying, “These stock increases are spooking the market, but maybe they’re reading too much into it, thinking it reflects slowing demand in China or the Asian region.

“There’s always a fairly slow start to most years; the first quarter is pretty weak, and then we have a strong second quarter, and I don't see anything to change that pattern,” Bhar says in the Reuters article.

In addition to the pullback in pricing, several sources say some consumers are pushing back deliveries of copper shipments because of a lack of near-term orders.

“Something has to give,” one source says regarding the contradiction of higher copper scrap prices and buyers delaying scrap shipments.

Another dealer says some brass mills are buying more scrap only when they have orders. Despite this, he says he feels the general sense of the market is that prices should remain stable, with generation of new scrap improving steadily.

“I think all metal scrap dealers are happy right now,” one exporter says. “Markets are good, and there is reasonable demand for the material. These are good times.”

China’s recently implemented Operation “National Sword,” which seeks to crack down on shipments of solid waste into that country, is a source of concern for some scrap dealers. While China has not targeted scrap metal shipments for inspection, several exporters say they are concerned the scope of inspections could be widened to include nonferrous metals.

A broker for a large export firm speculates, “Zurik might be flagged because it looks a little bit trashier.”

Despite some rallying in aluminum markets, several dealers say they are cautious going forward. “Parts of the aluminum market are good,” one larger aluminum broker notes. “But it does depend on the type of aluminum being sought.”

A dealer based in the South says, “On the domestic secondary market, there has been a significant run up in 380 aluminum prices. Consumers are very aggressive with prices. And there is room to continue.”

Schooled in recycling

Features - MRF Series

Dem-Con Cos. President Bill Keegan recently had an eye-opening experience during a Minnesotan city council meeting about a specific landfill. When residents who opposed the landfill were asked where they believed their garbage ended up, one woman replied, “It goes to the curb.”

Keegan says that was a pivotal moment for him. “[Her response] summarizes what most people think of the waste and recycling industry,” Keegan says. “Their knowledge ends at the curb.”

The public, he says, is not aware of the ins and outs of recycling. To help to educate them, Shakopee, Minnesota-based Dem-Con CEO Jason Haus had the idea to start its Green Grades educational program in 2009. Green Grades is focused mainly on educating students and “future leaders” in the waste and recycling sector.

Despite a general lack of awareness around recycling, Keegan says people do want to know what happens to materials once they leave the curb. However, inconsistent messaging from various haulers, cities, counties and state governments has people puzzled. “By and large, people are confused,” he says.

As a result, when Dem-Con was discussing the blueprint for its single-stream material recovery facility (MRF) that opened in November 2013, it was imperative that an educational component be part of the 60,000-square-foot facility’s layout. (Read more about Dem-Con’s MRF in the feature “Moving Forward,” available at www.RecyclingToday.com/article/rt0814-dem-concos-waste-management.)

With a conference space on-site at the new MRF, Dem-Con’s education center became a reality. This space allowed the company to expand Green Grades’ scope and capabilities.

Since the MRF’s education center opened in late 2013, more than 3,000 people have visited, with more than 40 school groups having toured the 80,000-ton-per-year MRF. The facility also hosts multiple entire fifth grade classes annually for several consecutive days.

“As the third generation of the company is looking to the future, realizing people are wholly unaware of what happens to their trash and recycling, we feel like we can be a better steward of the community by engaging the community,” Keegan says.

Coordinated messaging

To curtail confusion, recycling programs must have unified messaging, according to many industry sources. Engaging the community through educational outreach is a three-prong approach for Dem-Con that is targeted at the local, state and national levels. Keegan explains the company’s approach as:

bottom-up – a grassroots effort of educational programs that includes Green Grades;

midlevel – cities, counties and state educational outreach efforts with existing networks; and

top-down – national work, including the National Waste & Recycling Association’s (NWRA’s) Recycling Committee, which Dem-Con is part of, as well as The Recycling Partnership, Falls Church, Virginia, which he gives as two examples.

“Those [levels] all need to come together to achieve unified and coordinated messaging,” Keegan says.

To help drive the message through Dem-Con’s work, Keegan says the company hired Erin Chamberlain full time in August 2016 as its educational outreach director to lead the Green Grades program.

Chamberlain, a former teacher, says Green Grades motivates students to change their behavior when it comes to recycling.

When they tour the MRF, visitors are face to face with the very people who pull out contaminants in the recycling stream, such as tangled garden hoses and plastic film, daily. Visitors see firsthand how people are separating materials; it’s not all done automatically by machines.

“When they see there’s equipment but also people standing and sorting these materials and the problems and challenges contamination causes, there’s a human element that helps visitors understand they can’t put that [material] in [the bin],” Chamberlain says.

They also get to see conveyors, air blowers, magnets and eddy currents moving materials in various directions.

However, Chamberlain says, it is this human element that really catches visitors’ attention. She explains, “Sometimes there’s a perfect moment on the tour where people see something like a long piece of film being dragged by a drum feeder, and when they’re coming back at the end of the tour, they see workers still pulling the film off the equipment. They’ll ask, ‘Why would you put that in your bin? I will never again put that in the bin because I saw it was mixed in with everything.’

“The human element,” Chamberlain says, “adds a perspective that you can’t get from reading a book.”

She adds, “Someone has to tear open a bag of recyclables, and [visitors] take home the message ‘Don’t bag your recyclables.’”

In addition to touring the single-stream MRF, visitors get to explore Dem-Con’s construction and demolition (C&D) recycling facility, shingle processing yard, metals processing facility, wood processing facility and landfill, which are all located on one campus.

Interactive learning

While providing tours of MRFs is nothing new, other elements of Dem-Con’s MRF education center and Green Grades program are. Before taking the walking tour, people start their visits in one of two classrooms in the center.

In the classroom, a video of the working MRF is shown, giving visitors a closer look at the equipment in action. This is helpful for viewing machines that may be blocked by walls or covers, such as old corrugated containers (OCC) screens, and would be difficult to see on a tour. Additionally, this video gives people who are not able to go on the walking tour similar experience.

Managing the metro

Since Dem-Con Cos., Shakopee, Minnesota, opened its material recovery facility (MRF) in November 2013, it has been faced with several changes locally and statewide.

For one, the Twin Cities metro area has been overbuilt in infrastructure and capacity for single-stream processing, says Bill Keegan, president of Dem-Con. He says the market Dem-Con’s MRF serves is about 30 percent overbuilt.

“There’s a lot of competition out there for volume,” Keegan says.

Additionally, the MRF—which services 70 percent residential customers and 30 percent commercial—has seen an uptick in commercial loads. This is a direct result of Minnesota’s regulatory environment, which Keegan describes as “very progressive.”

Beginning Jan. 1, 2016, it became mandatory that all commercial buildings in a seven-county metro area recycle at least three materials. As a result, Dem-Con’s single-stream MRF has seen a dramatic increase in the amount of old corrugated containers (OCC) collected in commercial loads. Incoming collected loads also are packed with plastic film, Keegan says. Furthermore, Dem-Con, which operates as a merchant-style MRF, has more baled material entering its facility.

The issues there, he says, are the challenges baled material present for MRF equipment, as baling materials can make 2D sheets of paper into 3D balls.

He credits his MRF staff, including Facility Manager Lonnie Pauly, for the MRF’s flexibility. He says the MRF has a model focused on continuous improvement—every time the team meets, it tweaks or improves something in the facility.

Keegan says, “If they understand how the equipment works, they can make more educated decisions of where to put that recyclable item.”

Using iPads and an interactive map, people can scan pictures on the map and watch a short video clip of that piece of equipment in action.

The conversation gets more in-depth in the second classroom: the end markets room. Here, visitors are presented with a magnetic wall where they can sort materials by categories: fibers, metals, plastics and glass.

The other side of the end markets room features a Green Screen, an interactive kiosk and a scanner. Students can place a material, such as a plastic bottle, on the scanner, and a video shows them how a plastic bottle can become a piece of yard furniture. That area also includes examples of real items that have been made from recycled materials.

“It takes them a step beyond the MRF,” Chamberlain says of the center’s end markets room. “They understand how the recyclables are made into something new; that’s a cool moment for them.”

Beyond the MRF

“Green Grades doesn’t always mean people are coming to us, we also go out to classrooms,” Chamberlain says.

She visits elementary through high schools to educate students on the value of recycling. Classroom visits include more YouTube videos, as well as using the Green Screen app and even bringing certain exhibits from the education center to the classroom. Chamberlain says, “We’ve brought out materials to mimic how the equipment works at the MRF, so we had screens and magnets and gave students jumbled materials and asked how they could use equipment to separate steel containers, as an example.”

Lesson plans for teachers also have been put together, allowing them to teach recycling basics at their own pace.

In addition to classroom activities, Dem-Con takes students out of the school with its mobile education center. This classroom-on-wheels features interactive exhibits as in the MRF’s education center, including the Green Screen interactive kiosk; a sorting wall on the exterior; text, images and technology inside detailing single-stream recycling and other recycling processes (shingle, C&D, metal and organics); and an interactive augmented reality map showing off the MRF’s equipment.

The mobile education center gives Dem-Con the chance to educate even more students. Back at the MRF, 90 students cannot walk through the facility at once; the mobile center opens the door for more students to learn.

Keegan points to a high school’s annual environmental fair that serves as a measure of success of the Green Grades program and mobile center. Dem-Con visits the high school for one day, with 700 students walking through the center. When Dem-Con first began these efforts, none of the students had heard of the company. “Now we ask who’s heard of Dem-Con, and half of them will raise their hands. That’s a measure of success that they’re aware of that messaging and have heard of Dem-Con,” Keegan says.

Keegan and Chamberlain say, like the MRF’s education center, the mobile center will serve as a community asset. Chamberlain says a large part of the center’s focus is looking for opportunities for community outreach and events. This includes a five-day stint at the county fair in summer 2017.

“The trailer will allow us to reach larger groups that can’t join us at the education center,” Keegan says. “Because our service area extends beyond the Twin Cities metro, the trailer also gives us the capability to bring our education program to distant schools or community events.”

The future of Green Grades is hopeful and growing. If it ends up as a multistate program, Keegan says Dem-Con supports that. “It may be that it inspires other providers to provide education programs,” Keegan says.

Whatever it takes, educating Americans about recycling aims to lessen contamination and confusion, one lesson at a time.

The author is associate editor of Recycling Today and can be contacted via email at mworkman@gie.net.

Collection corner

Departments - Collection Corner

A charged effort

When it’s time to revamp a room in your home, The Home Depot is a good place to start. The home improvement retailer also is a good place to recycle rechargeable batteries.

Through its partnership with Call2Recycle, a nonprofit organization with U.S. headquarters in Atlanta, The Home Depot, also based in Atlanta, recycled more than 1 million pounds of rechargeable batteries in 2016 through its in-store takeback program. It is Call2Recycle’s first North American retail partner to achieve this milestone in a single year.

In total, Home Depot has recycled more than 8 million pounds of rechargeable batteries since the partnership launched in 2001.

Lush packaging

Lush Fresh Handmade Cosmetics’ recent recognition had nothing to do with its shampoos, fragrances or specialty products. The bath and body products company, along with KW Plastics, Troy, Alabama, was instead honored for the packaging that contains its products.

The Lush Black Pot, a package made for creams and lotions, was recognized as the first U.S. Food and Drug Administration- (FDA-) approved rigid packaging application for cosmetics use made from recycled polypropylene (PP). The company was honored during the 2017 Association of Plastic Recyclers (APR) Plastics Recycling Showcase, which was held in conjunction with the Plastics Recycling Conference, March 6-8, 2017, in New Orleans.

The Lush Black Pot is an injection molded container and lid made with 100 percent postconsumer PP. The package is made with KWR621FDA and KWR621FDA-20 resins from KW Plastics that have received FDA letters of nonobjection for 100 percent recycled content.

Beach to bottle

A day at the beach can include umbrellas, sunscreen and the plastic bottle it was packaged in, which may be left behind. To help rid beaches of this discarded plastic, consumer products company Procter & Gamble Co. (P&G), Cincinnati, will make its Head & Shoulders shampoo bottles from up to 25 percent recycled beach plastic.

P&G, in partnership with Trenton, New Jersey-based TerraCycle and Suez Environnement, Paris, will begin the beach plastic recycling program in France by the middle of this year, producing a limited-edition shampoo bottle. The shampoo will be sold through French retailer Carrefour.

It will be the world’s largest production run of recyclable bottles made with postconsumer recycled beach plastic.

Do you have a unique recycling-focused story that you would like to share? Please send a press release to Megan Workman at mworkman@gie.net.

Product spotlight

Departments - Product Spotlight

Oxford Instruments Vulcan metals analyzer

Oxford Instruments, headquartered in the United Kingdom, with a U.S. office in Concord, Massachusetts, has launched the Vulcan, a metals analyzer that the company claims is the fastest with the most advanced reporting tools on the market. The Vulcan:

Spectro’s SpectroPort portable arc/spark analyzer

Kleve, Germany-based Spectro Analytical Instruments, with U.S. offices in New Jersey and California, has introduced the SpectroPort portable arc/spark optical emission spectrometry (OES) metals analyzer. The company says the new model “delivers advanced OES technology in a unit that is as easy to use as a hand-held analyzer.” It also: